In extant species, bone formation is restricted to vertebrate species. Sp7/Osterix is a key transcriptional determinant of bone-secreting osteoblasts. We performed Sp7 chromatin immunoprecipitation sequencing analysis identifying a large set of predicted osteoblast enhancers and validated a subset of these in cell culture and transgenic mouse assays. Sp family members bind GC-rich target sequences through their zinc finger domain. Several lines of evidence suggest that Sp7 acts differently, engaging osteoblast targets in Dlx-containing regulatory complexes bound to AT-rich motifs. Amino acid differences in the Sp7 zinc finger domain reduce Sp7's affinity for the Sp family consensus GC-box target; Dlx5 binding maps to this domain of Sp7. The data support a model in which Dlx recruitment of Sp7 to osteoblast enhancers underlies Sp7-directed osteoblast specification. Because an Sp7-like zinc finger variant is restricted to vertebrates, the emergence of an Sp7 member within the Sp family was likely closely coupled to the evolution of bone-forming vertebrates.